AL-QADIR SEED CORPORATION (PVT.) LTD. vs FEDERATION OF PAKISTAN through Secretary Revenue Division Ss

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AL-QADIR SEED CORPORATION (PVT.) LTD. VS FEDERATION OF PAKISTAN through Secretary Revenue Division Ss. 114(6) & 177---Self-assessment of tax---Revision period for correction---Audit proceedings initiated before expiry of 60 days period revision---Legality---Taxpayer / company assailed initiation of audit proceedings when the 60-days period for revision had not elapsed---Validity---Section 114(6) of the Income Tax Ordinance, 2001 ('the Ordinance, 2001'), explicitly grants a taxpayer the right to revise a return within 60 days of its filing if any omission or wrong statement is discovered---Said provision (under S. 114(6) of the Ordinance, 2001) confers a substantive right upon taxpayers to correct errors or omissions in their returns without penalty provided the revised return is filed within the stipulated time---The proviso to S. 114(6) of the Ordinance, 2001 further clarifies that no approval from the Commissioner is required if the revised return is filed within the 60-days period ; which underscores the legislative intent to provide taxpayers with a clear opportunity to rectify mistakes within the specified timeframe---Self-assessment of tax is the salient and most distinguishable feature of the Ordinance, 2001---Section 114(6) of the Ordinance, 2001 is a substantive provision intended to facilitate voluntary compliance and correction of errors, whereas S. 177 of the Ordinance, 2001 provides enforcement mechanism---No overriding effect has been given under S. 177(1) of the Ordinance, 2001 above the provisions of S. 114 of the Ordinance, 2001 including subsection (2) thereof, as such the same is to be construed harmoniously with other provisions of the Ordinance, 2001 including S. 114(6) which confers right upon taxpayers to revise return with 60-days---The issuance of notice under S. 177(1) of the Ordinance, 2001 initiating audit before the expiry of 60-days period under S. 14(6) of the Ordinance, 2001 cannot be countenanced for that would undermine the right of a taxpayer to revise the return and benefit from self-assessment besides rendering S. 114(6) of the Ordinance, 2001 practically redundant and superfluous---There is a presumption under law against attributing redundancy to legislative expression much less a provision of law that confers substantive right in favour of a taxpayer--Taxpayer has a right to revise his return and no provision of law restricts his right to file the revised return---Thus, 60-days period is a statutory safeguard for taxpayers and any action that undermines this right is unlawful---In the present case, the respondents / Department actions in issuing the impugned notices before the lapse of the 60-days period depicted misuse of authority under S. 177(1) of the Ordinance, 2001---The statutory framework of the Ordinance, 2001 envisions a harmonious balance between the taxpayer's right to revise a return and the tax authorities' power to conduct audits---By prematurely initiating audit proceedings, the respondents disrupted this balance and rendered the petitioner's right under S. 114(6) of the Ordinance, 2001 ineffective; which was also clear violation of the principles of fairness and due process---High Court set-aside the impugned notices declaring the same to have been issued without lawful authority and in violation of the petitioner's statutory right under S. 114(6) of the Ordinance, 2001---Constitutional petition, filed by taxpayer, was allowed accordingly.

AL-QADIR SEED CORPORATION (PVT.) LTD. vs FEDERATION OF PAKISTAN through Secretary Revenue Division Ss — 2025 PTD 717 LAHORE-HIGH-COURT-LAHORE

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